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Pitch: Kodak Pitch for Startups

Standard

“Act as if! Act as if you’re a wealthy man, rich already, and then you’ll surely become rich. Act as if you have unmatched confidence and then people will surely have confidence in you. Act as if you have unmatched experience and then people will follow your advice. And act as if you are already a tremendous success, and as sure as I stand here today — you will become successful.”

Intro

Like thousands of others across the globe, I spent three hours in the theatre Christmas Day watching Leonardo DiCaprio deliver a brilliant, if intense, chaotic, and narcotic performance as Jordan Belfort, “The Wolf of Wall Street.”

Belfort, early on, has an extraordinary gift for storytelling, or “sales.” There’s a scene where he walks into a brokerage firm to sell penny stocks and he does it with so much gusto that all his other colleagues gather around to watch with amazement. But he has an even greater talent for helping others tell their stories, by creating a sales script for Stratton Oakmont sales brokers. According to both the movie, and Belfort’s book of the same name, he helps turn his ragtag group of friends without the prerequisite ivy-league education and policy, into an extraordinary group of salesmen, by teaching them to sell using a “Kodak Pitch.”

To push his stocks, Belfort hired the same kind of motivated young salesmen who had driven his meat trucks. He taught them his trusted cold-calling technique, the “Kodak pitch.” According to the original Forbes takedown piece of Belfort. In his own words, Belfort has said:

It’s a fool’s mistake to not have a framework of what the conversation is going to be with a buyer, says Belfort. In expressing this, he quotes a line from San Tzu‘s famous book, “The Art Of War,“ saying, “Every battle is won before it even begins.” Preparation is essential to determining that you, as a persuader, will come out successful.

Angels and Demons

Fundraising from angels and venture capitalists or getting meeting with busy entrepreneurs works the same way. Tout app CEO Tawheed Kater published his guide to raising $350K via angellist Now it helps if you’ve already read Brendan Baker’s guide to AngelLIst and read through some of Nivi and Naval’s posts on venture hacks, but the moral of the Wolf of Wall Street and startups is strikingly similar: selling investors successfully is best done with a scripted story, rather than an improvisation performance. [1]

Understand that in all sales, no matter how good you are at raising capital, you will face rejection. In Brendan’s post on anatomy of a seed financing, Appmakr, his sample company, “dealt with 170+ actors, including VCs, angels, seed funds, middlemen, corporates and even an angel group. They were rejected 130+ times, but raised $1M from 14 top investors.”

Need

“We have a great idea, but just need your knowledge, network, and capital to make this happen.” Investors don’t invest in companies that need them. They invest in companies that they want to be a part of.” Brendan Baker

As a seed-stage startup founder you should be spending time on building your product and working with your early customers to understand their needs to achieve the mythical “product-market fit.” The more time you spend on fundraising is time not well-spent. While it can be exhilarating to write long versions of your story, email countless founders for intros, you should follow the script for fundraising and for getting meetings with high-value targets.

Getting in Touch With Busy People (Or the law of “too long; don’t read)

Emails longer than 100 words will most likely not get read. Ideally your email would be four sentences max — not including the salutations and signature, which should include a clean link to your relevant social media profiles such as dribble if you’re a designer, github if you’re a developer, or twitter or LinkedIn if you’re product team member. Your social media profiles should be consistent across all platforms.

It’s easy to write ten paragraphs telling your founder story — we all make that mistake — but make no mistake on understanding this : an investor, whether an angel, venture capitalist, or founder, is extremely busy. Long tear-jerking stories won’t work, neither does desperation. There’s an old adage that goes, “ask for money, get advice; ask for advice, get money,” and while it’s not strictly true, in my experience it is fairly accurate. The reason is when you ask for money, you immediately make it a transactional relationship. This would be like meeting a potential romantic partner and immediately proposing a relationship without getting to know them.

Unless you already have some startup fame or credibility as an early employee at an Uber successful startup, or as a successful entrepreneur, direct pitches won’t work for you. Instead, the goal should always be a quick 15-minute phone call, Skype, or in-person meeting where you can get advice. Busy people will appreciate that you respect their time. [2]

First Principles: Refining Your Story

In order to be succinct, you must refine your story. As Elon Musk suggests, “I think it’s important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. [With analogy] we are doing this because it’s like something else that was done, or it is like what other people are doing. [With first principles] you boil things down to the most fundamental truths…and then reason up from there.”

Kodak Pitch

First, you introduce yourself as simply as possible. Then you introduce your idea, concept, or startup; by now, you may be familiar with the “x for y,” concept.

Then you shed some light on your background and experience. Lastly, you ask to set up a brief call where you can get feedback on your product or startup, where you’ll be able to tell a longer version of your story. A full email would look like this.

“Hi Josh,

I think you have one of the best perspectives on the payments industry. I’m working on a new mobile app called triangle that makes it easy for merchants to accept credit card payments without a lot of overhead. Previously, I was an employee at publisher, a micro-blogging platform where I helped lead design.I’d love to get on the phone with you or meet in person to get your feedback on my startup. If you’re interested, please let me know two times that work for you in the next two weeks and I’d schedule it.

Thanks in advance,

Kelly”

When you’re actually ready to raise money, you’ll know. AngelList is a great guide: if you’re not able to fill out a completely fleshed-out profile to include a founding team, a product, advisors, and legal counsel, it’s likely you haven’t thought through your business or startup well-enough.

Ultimately, you should be focusing on being exceptional in one thing. [3]

Naval explained, the most important thing is to understand that:

“Investors are trying to find the exceptional outcomes, so they are looking for something exceptional about the company. Instead of trying to do everything well (traction, team, product, social proof, pitch, etc), do one thing exceptional. As a startup you have to be exceptional in at least one regard.”

Outro

The goal is learning how to refine, craft, and tell your story in a consistent manner that will ultimately deliver you sales, whether that be investors, customers, or team members and advisors.

Your story matters, and the better you can tell it, in-person, on the phone, or with a beautiful pitch deck, the better chance you’ll have to raise that capital you need to build a successful company and make something people want.

Thanks to Aston, Ben, Leila, Jon, and Drew for reading drafts of this post.